RFA to President Obama: Gulf Response Requires Immediate Solutions and Long Term Strategies

Source: Renewable Fuels Association | May 05, 2010

Addressing the tragedy hitting the Gulf of Mexico and coastal areas requires both an aggressive short-term response and an equally aggressive long-term energy and environmental strategy. Prior to attending the White House Clean Energy Economy Forum on May 5, the Renewable Fuels Association (RFA) President Bob Dinneen wrote President Obama urging him to use this accident as a “teaching moment” to address the underlying problem that made this oil spill possible: America’s reliance on petroleum.

As Dinneen noted, “The juxtaposition of a green American farm field and the copper-toned oil slick spreading across the Gulf is striking.” America’s farmers are more productive than ever, using fewer acres and inputs to produce record crop after crop. Likewise, ethanol production is adopting new technologies making the process more efficient and expanding the basket of feedstocks from which ethanol is made. This improving productivity and efficiency makes renewable fuels like ethanol a critical component of a long-term plan to address America’s oil use. Specifically, Dinneen noted three proactive steps the Obama Administration could take to address this issue.

First, Dinneen wrote, “…the EPA should immediately move to allow for the blending of 12% ethanol by volume in each gallon of gasoline. EPA has to date ignored our counsel that the agency’s own oxygenate stacking rules, allowed by the Clean Air Act, gives refiners and marketers the flexibility to blend up to 12% oxygenate today (as you know, ethanol is classified as an oxygenate along with additives such as MTBE). While this is a good interim and immediate step, it does not address the need for a longer-term vision."

Second, Dinneen continued, “EPA should grant a full waiver for the use of 15% ethanol blends as soon as the Department of Energy (DOE) testing on catalytic converters is completed early this summer. Current EPA guidance on the issue suggests it is only considering a partial waiver for E15 used in vehicles model year 2001 and newer. Such a bifurcation of the market would create unnecessary confusion for retailers and consumers, and may severely limit the benefits of increased ethanol blending. To date, EPA has provided no scientific justification for such a limit on the waiver. We believe no such restriction exists and as such EPA should move as expeditiously as prudent to approve the full waiver.”

Third, Dinneen concluded, “…the DOE must reevaluate current loan guarantee programs to make them more accessible to next-generation ethanol technologies, such as cellulose-to-ethanol conversion. This largest obstacle facing the commercial deployment of these cleaner and more sustainable technologies is access to capital. The RFA and its cellulosic and next-generation ethanol producer members have met with DOE to express dissatisfaction with the current program structure. Unfortunately, DOE still has yet to award a loan guarantee to any cellulosic ethanol producer. Having a functional loan guarantee program that is fair and available to companies seeking to deploy these technologies is essential.”

“Increasing America’s ability to fuel itself through the use of domestic renewable fuels in and of itself will not solve all our problems,” Dinneen stated. “Nor would it have prevented this most recent oil tragedy from occurring. But with sound policies and forward thinking, it can greatly reduce the likelihood of such an event occurring again by reducing demand for oil. I encourage you to unleash the ingenuity and productivity of American farmers and ethanol producers to help end America’s dangerous addiction to petroleum.”